VAN SUSTEREN: Fun to have you. OK, sir, this morning I read the newspaper here in Israel, and "Haaretz" is reporting that the United States National Security Adviser Donilon is over here, and he was briefing Prime Minister Netanyahu on a possible strike. And I wondered if you had a sense that we're closer to war, or that Israel is closer to a war with Iran?

ROMNEY: Well, I understand that there are also reports that that is not exactly what happened when the national security adviser was here, so we'll have to let the national security adviser and the Israeli government to tell us exactly what happened. But that being said, I think we know that we're closer to seeing Iran becoming a nuclear nation than we were several years ago. I happened to speak at the Herziliya conference five years ago, laid out the seven steps I thought were necessary to dissuade Iran from becoming nuclear. It's taken a long time.

Some of those steps are just now being put in place, and we hope that those non-military options will be effective in keeping Iran from taking a course which would require other options.

VAN SUSTEREN: I guess the reason I was a little bit suspicious is because the prime minister said to you this morning, he says we have to be honest and say that all the sanctions and diplomacy so far have not set back the Iranian nuclear program one iota. So I thought that's sort of the prime minister saying, look, you know, Iran's moving forward and the sanctions aren't working.

Nothing is working. And basically you are giving us a hint that this may be closer than we thought.

ROMNEY: Well, I can't speak for the prime minister, but I can tell you that I think we have to execute all of the political, economic and diplomatic measures that are possible for the world to put pressure on Iran, to have them understand what it means to be crippled economically, diplomatically, by virtue of their nuclear ambitions. But at the same time, we recognize that if down the road, these sanctions are ineffective, that we have other options, and that it is unacceptable to America and to the world for Iran to become a nuclear nation.

VAN SUSTEREN: How do we make the decision when we are down the road?

The American people are little bit, I suspect, worried about intelligence. We had the problem with no weapons of mass destruction in Iraq after intelligence.

President Bush thought that there were weapons of mass destruction, Tony Blair, many others, the United States Senate. Everyone thought there were weapons of mass destruction. That turned out wrong. So what do you identify when you're at that point down the road with satisfaction?

ROMNEY: Well, your only sources are, of course, your intelligence, the IAEA inspectors, foreign intelligence as well, that is in some cases well connected with the sources of data that give us that information. But I don't imagine you're ever 100 percent certain. But you do know that there are three parts that have to come together for Iran to have a nuclear capability of a military nature. One is sufficient enriched material that they could create bombs or a bomb; second is a weaponization system and third, if the vehicle were going to be launched by rocket would be the kind of rocket that would take it someplace that could do the greatest damage.

So the intelligence community has to look at all three of those sources, and give us the best information possible. That's something which the president of the United States will have access to, and ultimately will have to make the decision as to when and whether Iran is about to become nuclear.

VAN SUSTEREN: If you are elected president and if it's down the road at that point, and Israel decides that it's got to go, it's got to move, and the United States stands by with Israel, as always has, would we standing by if you're the president as supporting them, for instance in the U.N. and in statements, or would we take a much more active military role or a support role?

ROMNEY: Well, I don't want to be highly specific as to the nature of our military options down the road. I think it suffices to say that Israel has the right to defend itself. It also is true that our president has said, and I agree, that it is unacceptable to the United States of America for Iran to become a nuclear power, and that suggests, again as our administration has also said, that we have all options on the table. Those include military options. Exactly how they would be exercised and who would exercise them and in what way, that's something which we don't want to signal to anybody else, and I certainly would not want to make foreign policy on foreign soil in any way trying to distinguish myself from the views that have already been expressed by our government.

VAN SUSTEREN: Is there any indications the sanctions, as far as you know, and I realize you have probably a little more access to information, but just looking at what we know, any idea that the sanctions are having a real impact so you have a sense of confidence that they may work out?

ROMNEY: Well, in the meetings I've had, not only here in Israel but also meetings I've had with leaders in the UK, and with briefings from individuals in the United States who follow the development in the Middle East at close range, there is the suggestion that the economic sanctions, particularly some of those put in place by Europe, where they have really tightened the screws very aggressively, that those economic sanctions are having a significant impact on the economy of Iran. Has that dissuaded them from their nuclear program? I don't believe so. I don't again have insight, top secret information in that regard. You did hear from the prime minister that he does not believe it's dissuaded them from their nuclear course, but it has an impact on their economy.

VAN SUSTEREN: All right. Now, let me go to the conflict in Israeli-Palestinian, well, actually the conflict in Iran here as well, but how would you seek to promote a resolution of that conflict? It's eluded every single president, the Israeli-Palestinian conflict. What do you think we should do?

ROMNEY: Well, the right course is for the Palestinians and the Israelis to sit down at the table together. The Palestinians need to recognize that the course to the two-state solution is not through the United Nations or through the United States or through anyone else, but through a face to face series of negotiations with the Israelis.

That is a process which I know our nation has encouraged. It's one which I believe future presidents will encourage, and I would hope that you'd see progress in that regard. But this is not something that we will impose from America. This is instead something we will encourage and facilitate, but it is up to Israelis and Palestinians to reach their own agreement and to find the two-state solution that we and our allies in Israel seek.